Child Support Agency's IT a "turkey from day one"

The IT reform of the Child Support Agency (CSA) has been called "a turkey from day one" in parliament.

A public accounts committee (PAC) report found that £539 million in general reforms to the agency failed because of IT development and outsourcing problems. Because of technical problems, 230,000 of the 250,000 cases of non-compliance haven't yet been handed to the agency's enforcement arm, meaning an estimated 60 per cent of the £3.5 billion in unpaid support isn't likely to ever get collected.

A new plan to tackle the backlog, deal with payment evasion and stabilise the IT system could cost an additional £320 million.

"The agency threw huge sums of money at a new IT system which was intended to underpin the reforms," said Edward Leigh, the chairman of the PAC. "The Department for Work and Pensions never really knew what it was doing in dealing with the contractors EDS and the system was a turkey from day one."

The EDS contract, originally worth £427 million, was procured under a private finance initiative (PFI), but the report said EDS was not able to meet the contract terms. The government no longer uses PFIs for IT contracts.

The contract was supposed to be in place by 2002, and following disputes over delays and faults, the overall price went up to £456 million. But in 2005, the contract was reorganised and the CSA cost fell to £381 million, including a £53 million penalty against EDS for not meeting terms and poor delivery. Given the troubles, the report criticised the department for not cancelling the EDS contract in 2004 when it had the chance.

The IT system eventually rolled out with 14 critical faults. It is unlikely to work properly before next year the report said, as it still has over 500 other faults which have yet to be fixed.

Because the agency outsourced its IT to EDS, the department "did not maintain the capability to be an intelligent customer," the report said, advising the CSA to strengthen its in-house IT team.

But it also said contractors who take on sensitive public service projects should "not lose sight of their wider obligation to the community in the single-minded pursuit of their commercial interests".

The DWP did not return requests for comment on this story at the time of publishing.

Aside from the EDS difficulties, the department also spent £91 million on external advisers such as IBM, but has no record as to how a third of the money was spent.

In 2008, a new body called the Child Maintenance and Enforcement Commission will takeover from the failed CSA.

"It took 13 years of failure for the department to reach the conclusion that the agency was not fit for purpose," said Leigh. "But it is by no means clear how this will benefit citizens or regain the confidence of those the agency was intended to help. The government must keep an iron grip on this new organisation to ensure that the lessons have been learned from the CSA debacle."

The DWP did not return a request for comment at the time of publication.

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